EDA Treasurer Urges Strategic Reflection on County Economic Choices

I serve as the treasurer of the Front Royal-Warren County EDA. I’ve received a number of calls and questions about our recent discussion at the EDA about the house at 158 Faith Way, where Jennifer McDonald and her husband Sammy North have lived. This property was previously forfeited by Ms. McDonald and Mr. North, but they have filed suit to prevent eviction, and then followed up with a cash offer to settle that suit.

While I have no particular dogs in this fight – I voted against any settlement with Ms. McDonald or Mr. North, and will continue to do so – I believe it is important to clarify some financial information, and to correct some clear mistakes in the public record. In financial decisions details matter, and here the case is detailed, complex, and nuanced. Our elected public officials don’t seem to “do nuance” very well.

The settlement proposed with Ms. McDonald et al was, in fact, a good financial outcome for the County. Mr. North has sued the EDA in order to retain the property. This litigation will cost a minimum of ten to twenty thousand dollars, and possibly much more. The proposed action was not a sale, it was an effort to settle yet another lawsuit, and receive cash in the process.

Failing to settle the lawsuit over 158 Faith Way will cost the county more than $175,000 according to our best estimates. This is because of two details: the property has attached liens which must be deducted from a sale; and any proceeds from a sale must be split with First Bank and Trust, according to a separate legal agreement with the bank. And then there are those out-of-pocket legal costs. The EDA’s initial vote to settle the lawsuit, rather than additional (and seemingly endless) expensive litigation was made in good faith, and for the single purpose of getting more money for the taxpayers of Warren County. (And yes, I am defending the decision, even though I do not ultimately agree with it.)

The Board of Supervisors had clearly indicated to the EDA board that no more funding will be available for litigation. Similarly, we have been assured that no funding will be available for hiring a private investigator, or accountants, to pursue other assets that may be recoverable from the guilty parties. It is important to note here that in every legal proceeding the EDA has prevailed, and has recovered significant monies. But recoveries will never be enough to replace the stolen funds and cover the legal expenses.

Even after the criminal sentencing of McDonald and the conclusion of all related litigation, a larger issue will still overshadow the case, possibly for years to come.

More than $20 million was stolen from the County. Another $9 million (and change) was spent on legal fees to both find, and recover, the losses. And yet, in recent years, the Warren County Board of Supervisors has reacted by actually cutting the county’s budget. In fear of being accused of “raising taxes,” the political leadership of our community has looked the other way.

If thieves stole your entire month’s pay from your personal bank account, would you just stop paying your bills for the month? That’s the best analogy I can think of here.

A $29-million hole has been blown through our public budgets, and has not been replaced. Additional recoveries from the guilty are possible – but the decision-makers stopped paying for forensic accounting, and have said they will stop paying for litigation. So more recoveries are unlikely. Even more damning, it’s highly likely that several former public officials were either involved in McDonald’s schemes or knew of those who were. However, federal authorities have stated that they will not pursue any further prosecutions.

It is an unfortunate reality, but taxes must be raised, and I applaud the supervisors for moving in that direction. Past cuts to taxes during a period of nearly 7% annual inflation were a mistake, even before accounting for our extraordinary losses due to theft. Our community needs to learn to grapple with the ongoing, complex realities of the McDonald case.  Elected leadership must take on the challenging task of communicating hard and necessary – and unpopular – decisions to the public. The elected leadership of Warren County has struggled to understand and listen to sound advice, and take actions accordingly. The Board of Supervisors has a history of decisions that have not been in the long-term best interests of the citizens of the community, nor the economic health and vitality of the county. The blind obedience to the mantra of “no increased taxes” harms the long-term growth, vitality, and stability of our county in terms of the quality of our public schools, teacher retention, emergency services, social services from the youngest to the oldest of our citizens, and the work itself of economic development.

I want to repeat my point that financial matters are complex, and must be given better consideration than a quick public statement or a posting on Facebook. In the future, please dig deeper. I trust that each supervisor now understands, and will publicly admit, that they are in favor of spending that added $175,000 to deny any settlement with McDonald or North. I know I am, and I will continue to trade off this relatively small amount of cash for what I consider to be justice for our community.

In my view, there are things much more valuable than money. I personally opposed any settlement with McDonald, and I voted that way. Justice, integrity, and retribution are all more valuable than settling for what amounts to less than 3% of the total that McDonald owes the people of Warren County. Hopefully her upcoming criminal sentencing will begin to claw back some of that integrity. And on the financial side, our public officials will need to work to do the same.

Jim Wolfe
Front Royal, Va.
Treasurer, Warren County Front Royal EDA
Associate Professor of Management, George Mason University

Disclaimer: The opinions expressed in the letters published on this page are solely those of the respective authors and do not necessarily reflect the views or opinions of the Royal Examiner’s editorial team, its affiliates, or advertisers. The Royal Examiner does not endorse or take responsibility for the accuracy, completeness, or validity of any statements made by the authors. The Royal Examiner has not independently verified the statements and claims presented in the letters. Readers are encouraged to exercise their judgment and critical thinking skills when evaluating the content. Any reliance on the information in the letters is at the reader’s own risk.

While the Royal Examiner makes every effort to publish diverse opinions, it does not guarantee the publication of all received letters. The Royal Examiner reserves the right to edit letters for clarity, length, and adherence to editorial guidelines. Moreover, the Royal Examiner does not assume any liability for any loss or damage incurred by readers due to the content of the letters or any subsequent actions based on these opinions.

When authors submit a letter to the editor, they grant the newspaper the right to publish, edit, reproduce, or distribute the content in print, online, or in any other form.

We value our readers’ engagement and encourage open and constructive discussions on various topics. However, the Royal Examiner retains the right to reject any letter that contains offensive language, personal attacks, or violations of any legal regulations. Thank you for being a part of our vibrant community of readers and contributors, and we look forward to receiving your diverse perspectives on matters of interest and importance.